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How Raptors/Kings Trade Works Financially

December 10 2013 at 10:58am CDT By Chuck Myron

NBA trades are rarely simple exchanges of players. Teams exercise flexibility when they swap their players for another team’s, as the Kings and Raptors did Monday, and they also often gain even more flexibility as a result. That’s indeed the case for Toronto and Sacramento, as their seven-player trade allowed both teams to acquire trade exceptions. Raptors can create an exception worth $4,583,432, while the Kings can make one for $2,316,429. The teams can use these exceptions in later trades to take on players in transactions that wouldn’t otherwise work, since they’re both above the salary cap.

Toronto can accomplish this by structuring the swap as two separate trades. The first would be Patrick Patterson ($3,105,301) and Greivis Vasquez ($2,150,188) for Aaron Gray ($2,690,875) and Quincy Acy ($788,872). The Raptors don’t get an exception from this part of the deal, since only non-simultaneous trades bear exceptions, and teams can’t surrender more than one player in a non-simultaneous trade. This four-player swap just barely fits within the the salary-matching framework for simultaneous deals involving less than $9.8MM in outgoing money. A team’s incoming salary must be no more than 150%, plus $100K, greater than what the other team gives up. Toronto’s incoming salary comes to $5,255,489. That’s above 150% more than Sacramento’s side, but within that $100K cushion.

Placing those four players in a simultaneous trade allows the Raptors to put together the part of the deal that yields the exception. Rudy Gay and his $17,888,932 salary would go in a single, non-simultaneous transaction in exchange for John Salmons ($7,583,000) and Chuck Hayes ($5,722,500). The difference between Gay’s salary and the combined pay for Salmons and Hayes is $4,583,432, which is the amount of Toronto’s exception.

Sacramento’s best strategy appears to involve breaking the deal into three parts. The Kings could make the same exchange of Gay for Salmons and Hayes, though from Sacramento’s perspective, that’s a simultaneous trade, since the Kings are giving up more than one player. It fits the salary-matching requirements for a simultaneous trade in which a club gives up between $9.8MM and $19.6MM in salary, since Gay’s salary is less than $5MM more than what Salmons and Hayes make.

The Kings can also line up Vasquez and Gray as a single, simultaneous transaction. Sacramento is giving up only one player, but the Kings would take back slightly more money, so there wouldn’t be an exception for them if it were a non-simultaneous trade. Their salaries are within the salary-matching framework of 150% plus $100K for deals of this size. That wouldn’t be the case if the Kings made Acy a part of this swap. Usually, players on minimum-salary contracts, like Acy, wouldn’t count toward incoming salary in a simultaneous trade, but Acy’s on a three-year deal. That means he wasn’t signed using the minimum-salary exception, and therefore, he can’t be acquired using the minimum-salary exception. In other words, his salary needs to be taken into account, pushing a theoretical three-player deal involving him, Gray and Vasquez over the salary-matching limit.

So, Acy goes into the non-simultaneous trade from which Sacramento can draw its exception. The Kings net $2,316,429 by subtracting Acy’s salary from Patterson’s. Taking on Acy’s salary in another part of the trade would allow Sacramento to collect an exception worth Patterson’s entire salary, but there doesn’t appear to be a way to make that happen.

Teams aren’t obligated to structure their transactions in a way that creates the largest possible trade exceptions, but it’s usually to their advantage to do so. The exception the Raptors created via this summer’s Andrea Bargnani trade was too small to accommodate any of the players from this week’s deal. Teams have one year from the date of the trade to use the exceptions, and many times they simply expire. For now, the exceptions the Kings and Raptors created with their trade this week gives each team an additional weapon, with the trade deadline looming in a little more than two months.